Athlete sponsors gear up for Salt Lake

Winter Olympics are key moment in sports gear marketing

AugustCole

SALT LAKE CITY, Utah (CBS.MW) -- The 2,500 athletes expected at the 2002 Winter Olympic games will compete in 78 different events but have one thing in common.

Sponsors.

With more than 3 billion viewers in over 160 countries expected to tune in to the games, the event is a must-place moment for athletic equipment companies.

From some of the biggest names like Nike, present in events ranging from speed skating to hockey, or Rossignol, which equips both alpine and Nordic skiers, the games present a moment of unparalleled exposure for events, and sponsored athletes, that otherwise won't make it into the living rooms of most American households.

For the already well-known and established brands, the sponsored athletes reinforce the ubiquitous logos like Nike's "swoosh," as familiar under the basket in Madison Square Gardens as in the peloton of the Tour de France.

It's part of a bigger push, and an old tradition as elemental as athletic competition. As a company, you need to get your product and logo in front of as many people as possible.

The bigger picture

For Nike
NKE, +1.09%
with a truly global reach, the winter games are a big deal, though the company is not an Olympic sponsor. That said, the enthusiasm for the event is high because competitive events itself are a big part of the company's identity.

Interestingly, that showcase comes for some of the lesser-followed sports out there like speed skating. Nike's six-fabric Swift Skin is designed to give racers a more aerodynamic suit than the traditional garb. But Nike isn't new to the ice.

The company has been involved with hockey since 1995, it owns Bauer, and will provide the jerseys and pants at the games as well as provide special-edition skates to the U.S. and Canadian squads. Plus, a new high-tech helmet that promises a tighter fit has already been introduced by Mario Lemieux and will appear in the games too.

Other forms of support won't likely make it to the camera, but will still be important. A team of 20 local Nike seamstresses near the hockey events will do last-minute stitching, embroidering and repair. That's the level of involvement the company wants with the athletes, on camera or not. Nike did not detail what it is spending on sponsorship.

For other brands competing for cool, the line between success and failure is as narrow as the margin of victory in a slalom race.

Take Oakley
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which gets about 6 percent of its sales from the goggles popular among snowboarders and skiers but is one of the biggest sunglasses players on the market. Goggles account for about $15 million in sales while sunglasses provide some $400 million. Managing that girth is as much a science as designing the company's Iridium lenses.

"The way you stay cool is you don't promote the fact that every Olympic athlete wears the product," said Wedbush Morgan Securities analyst Michael Pachter. The company said it would have between 100 and 150 athletes at the games using its eyewear.

"We feel get our best bang for our buck for it," he said of the athlete's using the company's glasses and goggles. To that end, the Salt Lake games will account for about 10 percent to 15 percent of the company's marketing effort.

Yet for Oakley, which is working hard to get its "O" logo as recognizable as the swoosh from Oregon, just the presence of that brand on the slopes counts for a lot.

"Oakley is a logo-driven brand," Pachter said, adding that it's backed up by some of the best, if not the best, optics in the business. The "O" is even on the sole of the company's newest shoes. Plus, the company's formula is a low-cost one too. Pachter figures Oakley spends about 2 percent of its $600 million in sales on marketing.

Nike needs to throw out much more, understandably. Nike spends 5.5 percent of its $9 billion in sales on marketing, Pachter said.

It's ultimately hard to determine what is gained in the events because companies keep mum about what they spend on athletes. So it's the intangibles, then, that become important.

Off the slopes

At a retail level for ski equipment, the promotional effect is not as pronounced because fit determines what a customer buys more often than does anything else. Yet the Olympics represent a rare opportunity to get these events on to prime-time coverage.

Alpine skiing typically is one of the most watched events during the games, said Mary Jo Tarallo, spokeswoman for industry trade group SnowSports Industries America. For that reason, the events are important.

But ski technology has changed to favor models that are designed for easily skiing different types of terrain, steep as it may be. It wasn't always this way. The summit of cool a few years ago might have been a pair of race-caliber slalom boards. Now the crop of sponsored all-mountain extreme skiers dictate consumer taste as much as a World Cup win at an unpronounceable resort in Central Europe used to.

Then again, it may not ever have made much of a difference.

"It's just never seemed to be a huge deal," said Fiorini Sports manager Pat McDonald. McDonald has been with the Seattle-based shop, a staple of the Pacific Northwest ski scene, for 19 years.

"From our business standpoint, particularly in boots, we sell what fits," he said. "It may get them in the door but they're not going to buy on that."

For snowboarding, which debuts in Salt Lake as a medal sport, the sponsored free riders and World Cup competitors already shape brand image more than the Olympics likely will.

In other events like Nordic skiing where the coverage tends to focus just on collapsing finishers, the TV and media coverage is valuable because it raises awareness of a niche sport.

"Fischer's no. 1 goal, since we have such a large market share, is to grow the market itself," said Andy Gerlach, president of Endurance Enterprises, which represents Fischer Skis' cross-country racing interests. Gerlach said 70 percent of Olympic Nordic skiers would be competing on Fischer, which is the world's largest Nordic ski maker.

"We love the opportunity," he said.

More than a game

Though a specific gold medal won't necessarily boost sales of skis, boots or bindings, Rossignol spokeswoman Jeanne-Marie Gand said that there's a more subtle effect on building a perception of quality among buyers of all level and aspiration. Rossignol has all three products under its name.

"It's a subtle message," she said. It's also a regional one.

For European viewers and spectators, accustomed to coverage of the World Cup series of winter sports, seeing skiing on television isn't an anomaly and therefore the brands are well known in that context.

Not so in the U.S. This creates an opportunity to show a sport, and all the gear that goes with it, to someone who may not otherwise follow an event on television.

And for the sponsors themselves, the industry has its own pecking order too that's fed by podium placement.

"Particularly within the industry it's a prestige thing," said Tarallo.

Ultimately those events will be about competition among athletes, not companies.

"In the Olympics, the most important thing is country and athlete ... then brand," said Gand.

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